Income tax free: Salaried employees will no longer have to pay a single rupee tax on an income of Rs 12.75 lakh. This rule is coming into effect from the new financial year 2026 i.e. today, 1 April 2025. Now let’s see some calculations that if your income is Rs 1 lakh per month or more, then how much tax will have to be paid?
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Income tax free: In the budget, Finance Minister Nirmala Sitharaman announced changes in the income tax rules, giving a big relief to the middle class. She excluded taxpayers earning up to Rs 12 lakh annually from the income tax payment category. That is, if a person earns Rs 12 lakh annually, he will not have to pay even a single rupee tax. Earlier, under the new tax regime, this limit was Rs 7 lakh.
At the same time, standard deduction of Rs 75000 was also included, which will be applicable to salaried employees. That is, salaried or salaried employees will not have to pay a single rupee tax on earning of 12.75 lakhs. This rule is coming into effect from the new financial year 2026 i.e. today 1 April 2025. Now let us give some calculations that if your income is Rs 1 lakh monthly or more, then how much tax will have to be paid.
How much tax will a person earning Rs 1 lakh have to pay?
The annual income of those who get a monthly salary of Rs 1 lakh will be Rs 12 lakh. In such a situation, he will not have to pay a single rupee tax. On the other hand, if you earn Rs 12 lakh 75 thousand i.e. earn Rs 1 lakh 6 thousand 250 monthly and you are a salaried employee, then also you will not have to pay a single rupee tax.
How much tax will have to be paid on earning Rs 13 lakh?
If you know that if someone’s annual salary is Rs 13 lakh, then how much tax will he have to pay? Let’s understand this complete calculation.
New Tax Regime (2024)-
₹0-₹4 lakh: Zero- 0
₹4-₹8 lakh: 5%
₹8-₹12 lakh: 10%
₹12-₹16 lakh: 15%
₹16-₹20 lakh: 20%
₹20-₹24 lakh: 25%
30% tax will be levied on income above Rs 24 lakh.
Now if we calculate the tax on the income of Rs. 13 lakhs then…
After deducting the standard deduction of Rs. 75000 from Rs. 13 lakhs, the total tax liability will be Rs. 12.25 lakhs.
0–4 0% = 0
4–8 5% = Rs 20,000
8–12 10% = Rs 40,000
12–16 15% = Rs 3,750
(Note: In the slab of 12 to 16 lakh, the income of those earning 13 lakh is reduced to only 25 thousand rupees, on which 15 percent income tax is applicable. Accordingly, the income tax on an income of 13 lakh is Rs 63,750, on which there is a provision of 4 percent cess, which amounts to Rs 2250. In this way, the total income tax is Rs 66,000. But due to marginal relief, only Rs 25 thousand tax will have to be paid on this.)
Meaning of Marginal Relief- No tax liability should be more than the taxable income. If the tax liability is more, then the rule of marginal relief will be applicable and then tax will have to be paid equal to the taxable income.
How much tax will have to be paid on an annual income of 15 lakhs?
Since Rs 15 lakh is more than the income tax exemption limit of the new tax regime of Rs 12 lakh. Therefore, tax calculation on an annual income of Rs 15 lakh will be done as per the tax slab.
After deducting standard deduction….
1500000 – 75000 = Rs 14,25000
0–4 0% = 0
4–8 5% = Rs 20,000
8–12 10% = Rs 40,000
12–16 15% = Rs 33,750
Total tax = Rs 93,750
Cess of 4% on tax = Rs 3,750
Net taxable income = Rs 97,500
Based on this calculation, a salaried person will have to pay tax of Rs 97,500 on annual income of Rs 15 lakh under the New Tax Regime 2025.
